Followers

May 26, 2012

The proposed Cadiz Water Project passed a significant milestone this week when the San Bernardino County Board of Supervisors approved a memorandum of understanding outlining a review process for the plan to extract massive quantities of water from beneath the eastern Mojave Desert.

The so-called Cadiz Valley Conservation, Recovery and Storage Project is a $536.25 million proposal by Los Angeles-based Cadiz, Inc. to sink 34 wells into the desert and construct a 44-mile pipeline along a railroad right-of-way until it meets up with the aqueduct that carries Colorado River water to the Los Angeles and Orange County metropolitan areas. That system will be used to draw an average of 50,000 acre-feet of water from the Cadiz Aquifer for use by the Santa Margarita Water District, the second largest water agency in Orange County; the Three Valleys Water District, which provides water to the Pomona Valley, Walnut Valley, and Eastern San Gabriel Valley; the Golden State Water Company, which serves several communities in Southern California, including Claremont; Suburban Water Systems, which serves Covina, West Covina and La Mirada; and the Jurupa Community Services District, which serves Mira Loma in Riverside County.

The Cadiz Valley lies just south of the Marble Mountains and northeast of the Sheep Hole Mountains near the National Trails Highway. Cadiz is home to a former railroad stop along the Santa Fe line, 17 miles east of Amboy and 70 miles from Needles. Cadiz, Inc. owns or has options on 45,000 acres in and around the Cadiz Valley, 9,600 acres of which is zoned for agricultural use. That company operates an organic table grape, citrus, melon, pepper, squash, asparagus and bean growing farm on 500 acres in Cadiz, utilizing roughly 1,965 acre-feet of water per year to sustain that operation.

Cadiz has made a disputed claim to the water rights beneath 34,000 acres it has tied up in the area, and its plan calls for tapping that water supply, which is connected to other neighboring aquifers beneath land not controlled by Cadiz, Inc. Cadiz maintains it has the right to pump that water and sell it as it sees fit.

Environmentalists and many residents of the East Mojave are opposed to the project, and they maintain the project will deprive the already parched desert of its most precious resource, wreak ecological devastation to the environment and allow Cadiz, Inc. to appropriate water rights it does not legally possess to commandeer water and thereby privatize a public resource.

Cadiz has arranged for the Santa Margarita Water District, which lies 217 miles from the Cadiz Valley and will be the recipient of the lion’s share of the water to be obtained under the plan, to serve as the lead agency in the environmental certification of the project. Critics of the project say this is an unacceptable conflict of interest and have already cited shortcomings in the environmental impact report, claiming that document does not accurately describe or provide a mitigation for the impact the drafting of water will have on adjacent aquifers. Environmentalists maintain that ultimately the desert’s springs, which support the region’s fragile wildlife, will dry up if such vigorous pumping is initiated. During a three-and-a-half hour hearing on May 1, they pleaded with the county board of supervisors not to have the county enter into a memorandum of understanding with Cadiz, Inc. and the Santa Margarita Water District relative to the project.

Other critics of the project maintain that diverting the region’s water resources to Orange and Los Angeles Counties will sharply curtail or eliminate any future development potential in the East Mojave.
Supervisors at the May 1 hearing were told by Scott Slater, the president and general counsel for Cadiz, Inc., that the project would conserve water. They also heard from local contractors and vendors who stand to make money by working on or supplying materials for the pipeline to be constructed.

According to Christian Marsh, a contract attorney retained by the county to advise it on the Cadiz project, the memorandum of understanding does not give final approval to the project but puts a regime in place by which the project application being processed through the Santa Margarita Water District can be reviewed by the county, and provides the county with the authority to make an ultimate veto of the permitting of the project. He said the approval of that permit will likely be heard by the end of the summer.

Supervisor Neil Derry, expressing skepticism that the Santa Margarita Water District would give proper weight to the input of San Bernardino County residents and interests during the approval process for the project, was the sole dissent in a 4-1 vote to approve the memorandum of understanding.

May 25, 2012

Cadiz, California is an eastern Mojave Desert railroad stop hidden along historic Route 66, crisscrossed by the Burlington Northern-Santa Fe (BNSF) and Arizona and California (ARZC) railroads. Traveling through this part of California, you may have noticed the splashes of green vineyards and lemon orchards that line the desert horizon. Cadiz Inc., a California public company, operates a 1,600 acre farm here. The company is the largest private landowner in the area, with a total of 34,000 acres (50 square miles) in Cadiz and 11,000 additional acres in other parts of the Mojave.

Cadiz sits atop a groundwater system in a 1,300 square mile watershed. Under natural conditions, millions of acre-feet of clean renewable groundwater move slowly downward beneath the Cadiz Valley property. This water ultimately reaches the nearby Cadiz and Bristol Dry-Lake playas, the low-point in the watershed, where it merges with highly-saline brine and becomes 10 times saltier than the Pacific Ocean. In this closed basin, the brine and dry surface crust demonstrate that the water, which has no other natural outlet to streams, rivers or lakes, is lost to evaporation.

When I joined Cadiz Inc. in 2008, we set aside an earlier proposal for a water storage project at the site and brought in top-notch hydrologists and groundwater experts to study the groundwater system. We chose to focus on conserving water that is presently being lost to the atmosphere after it has migrated to the dry lakes. Our goal is to put this conserved water to its highest and best beneficial use as a new municipal water supply that can alleviate pressure on imported water from Northern California and the Colorado River.

The people of California adopted a Constitutional Amendment, Article X Section 2, which compels maximizing the reasonable and beneficial use of water and the avoidance of waste. This provision has fostered a plethora of conservation efforts aimed at reducing and eliminating evaporative losses. This provision is the cornerstone of the project. But for the efforts of Cadiz, millions of acre-feet of fresh potable groundwater will be lost without further beneficial use.

While all of California’s water is a public resource, property rights to the use of water are commonly vested in cities, districts, businesses, farms and individuals. As the owner of 50 square-miles of real property overlying a groundwater basin, Cadiz maintains overlying rights to utilize groundwater beneath its land and to develop water through conservation. The Cadiz farm is presently developed on 1,600 acres, but an additional 8,000 acres of the Cadiz property is presently zoned for agriculture and permitted to use groundwater for irrigation of crops. In absence of the conservation project, Cadiz could pump an equivalent or even greater quantity of water than contemplated by the project for use on its overlying lands. State policy mandates putting water to its highest, most beneficial use and prohibits waste. These rights and policy form the basis for the conservation project.

In 2011, we began a permitting process for the Cadiz Valley Water Conservation, Recovery and Storage Project. It proposes to capture 50,000 acre-feet of groundwater per year, both water that is naturally recharging into the basin annually and water that could be retrieved to the well-field before it becomes hyper-saline and evaporates. The annual quantity is equivalent to approximately 1% of the estimated quantity of groundwater already in storage.

The conserved water will be delivered via a 43-mile pipeline to the Colorado River Aqueduct for customers throughout Southern California. Instead of building a pipeline across undisturbed desert, the pipeline to the aqueduct would be constructed along the existing ARZC railroad.

A second phase of the project would provide underground storage for imported surplus water in wet years but only after the first phase proves viable and after the second phase undergoes further environmental review. During the second phase, surplus water from the State Water Project or Colorado River Aqueduct could be banked in the aquifer system and held in storage until needed.

Those familiar with Cadiz may remember the project proposed in this area over 10 years ago. In 2000, the company developed a project with the Metropolitan Water District of Southern California that could have stored and recovered up to 150,000 acre-feet of groundwater in any year. The delivery pipeline would have crossed federal desert. The U.S. BLM and Metropolitan exhaustively reviewed this earlier project, and BLM issued permits to proceed. But ultimately the Metropolitan board decided not to implement the project.

The company was not blind to the criticisms of the earlier project, and the present project has been designed with respect for the historical concerns raised. More than three years were spent in revisiting commentary regarding the earlier project and gathering fresh data. As a result, the new project has been reduced in capacity, focuses on conservation, and will be built on disturbed land.

The project currently has six southern California water provider participants, including Santa Margarita Water District, Three Valleys Municipal Water District, Suburban Water Systems, Golden State Water Company, Jurupa Community Services District and California Water Service Company, with reserved rights to annual supplies from the project. Cadiz has also reserved up to 20% of the project’s supplies for future use by San Bernardino County water agencies.

As longtime members of the county’s business community, we are also committed to supporting local jobs and businesses. Inland Empire economist Dr. John Husing estimates that the project would have a four-year economic impact of $878 million and create an annual average of approximately 1,100 direct and indirect jobs during construction. In addition, the project is expected to increase the county’s annual property tax revenue by roughly $5.4 million per year, including approximately $613,000 per year for the Needles Unified School District.

Last month, in a pledge to local jobs & investment, Cadiz committed to purchase 80% of the materials needed for the project’s facilities from San Bernardino County businesses and dedicated 50% of jobs to county residents, including a goal of 10% for local veterans. Encouraged by the potential project benefits, many local chambers of commerce, including Adelanto, Fontana, Rancho Cucamonga, Twentynine Palms and Needles, expressed support for the project.

There are many misconceptions about the project, including that it will impact surrounding water users or wildlife in the watershed. As described in the project’s draft environmental impact report, extensive modeling and fieldwork found there would be no significant impacts to critical resources of the desert including water, air, springs, subsidence or saline/fresh water movement from the project. The Mojave National Preserve and landowners within it are also far outside the anticipated modeled areas of drawdown.

But to provide assurance that the desert ecosystem and local land uses will not be harmed, a state-of-the-art groundwater management program, called the Groundwater Management, Monitoring and Mitigation Plan, was designed by leading groundwater experts to monitor aquifer conditions and address any potential for impact. Many different monitoring features will be used throughout the watershed, including more than 40 monitoring wells at various locations, air monitoring devices and new weather stations.

Additionally, the plan protects third-party well owners in the area from economic harm. Any well owner can be monitored and any impact, though not anticipated, would be mitigated under the plan. In May 2012, Cadiz and San Bernardino County entered into an agreement granting the county full enforcement authority. All monitoring reports will be filed with the county and made available to the public. This independent role will enforce the commitments to protect the desert and other land users.

The project is currently undergoing an environmental review and permitting process. Many decisions about implementation and operation are yet to be made. As we move through this process, we look forward to working with the many stakeholders in the community to provide a safe and sustainable water supply solution.

Scott Slater is Cadiz Inc.’s president and general counsel and is also a member of the company’s board of directors. In addition to his role with the company, Mr. Slater is an attorney with and shareholder in Brownstein Hyatt Farber Schreck, a leading water practice firm. For 27 years, Mr. Slater’s legal practice has been focused on litigation and the negotiation of agreements related to the acquisition, distribution, and treatment of water. Mr. Slater is also the author of California Water Law and Policy, a treatise on the subject.

May 24, 2012

Questions are being raised over whether public officials at several Southern California water districts, including Orange County’s second largest, broke the law by meeting — and in some cases voting — in secret on a controversial project to extract water from the Mojave Desert.

The private Cadiz Valley Water Conservation, Recovery and Storage Project attracts both ardent supporters, who say it will provide a safe and reliable water supply in times of drought, and fierce detractors, who worry it will destroy a crucial desert aquifer that provides water for local residents and wildlife.

But while that debate now plays out on a public stage, many of the initial discussions by public agencies on this highly controversial project were behind closed doors away from public scrutiny, records show. And according to a leading open-government expert, the legal justification used to hold those talks in secret doesn’t appear to hold water.

Records indicate that eight Southern California water boards have discussed Cadiz in closed session at least 30 times since 2009, including two votes to authorize negotiations on the project. All were held under the real estate exemption to the state open-meetings law known as the Ralph M. Brown Act.

That exemption only allows discussion of price and payment terms regarding a change in ownership or possession of land or structures, according to Terry Francke, general counsel to the open-government advocacy group Californians Aware. He’s considered a top expert on the Brown Act.

But after requests, neither the Cadiz company nor Santa Margarita Water District, the most active district in the project, have pointed to any specific real estate that would change hands.

The district appears to be obtaining an option “to get a commodity in the future from somebody else,” said Francke. “So I don’t believe that qualifies” for discussion under the real estate exemption.

Santa Margarita, meanwhile, insists that the closed sessions were legal.

“We did not do anything that was unlawful,” said Michele Miller, a spokeswoman for the South Orange County district.

“Water rights constitute real property which allows a public agency to enter into closed session,” she added later in a prepared statement.

Francke disagrees, reiterating that the exemption covers only land and buildings.

Regardless of whether the closed meetings were legal, the Cadiz project is expected to have far-reaching ramifications.

Using wells on 70 square miles of land it owns in San Bernardino County, Cadiz Inc. plans to pump 16 billion gallons of water every year for 50 years and sell it to Southern California water agencies. Santa Margarita, Three Valleys Municipal Water District in Los Angeles County and Jurupa Community Services District in Riverside County are now “project participants.”

Cadiz presents its venture as a safe and reliable source of water that will also spur thousands of jobs and millions in tax revenue during four years of construction. A group of residents in the area around the project, however, are concerned about potential harm to the region’s aquifer, which serves as their water supply. Environmentalists have also expressed worries over impacts to desert animals like bighorn sheep and the desert tortoise.

Cadiz CEO Keith Brackpool is a politically well-connected British businessman who first proposed a version of the current project in the 1990s. Southern California’s main water agency came close to approving it in 2002 but scrapped its plans after an outcry from environmentalists and opposition from U.S. Sen. Dianne Feinstein.

The project lay dormant until Cadiz announced in June 2009 that smaller water agencies had formally shown interest in becoming involved. It now has three public and three private “confirmed participating water providers” and is undergoing a review of environmental effects.

Records indicate that since early 2009, closed-door discussions on Cadiz have been held by directors of the Cucamonga Valley, Santa Margarita, Eastern Municipal, Three Valleys Municipal and Monte Vista water districts, as well as the San Diego County Water Authority, San Gorgonio Pass Water Agency and Inland Empire Utilities Agency.

The Brown Act requires that nearly all discussions and decisions by water district boards take place before the public during an open meeting. Only narrow, specific exemptions like personnel and legal issues may be discussed behind closed doors.

Separate from the legality of the closed sessions, questions also arise over whether top officials held policy discussions out of the public’s view.

According to meeting records, two of three districts now involved with Cadiz approved negotiations before ever publicly discussing why they are interested or what the project entails.

A “letter of intent” approved by Santa Margarita’s board in May 2009 states that the district and Cadiz plan “to develop a binding memorandum of understanding” that will “incorporate the above referenced economic terms,” which include water prices. Santa Margarita’s first public discussion on the project didn’t occur until a year after the board's approval of negotiations, records show.

Because of this, Francke believes the board likely discussed policy issues in secret, a potential violation of state law.

“If they did not discuss it in closed session, they must have discussed it in a secret session somewhere or in a serial meeting,” Francke said. “That takes into the secret realm a preliminary phase of decision making that the public is entitled to hear and see.”

Serial meetings involve a majority of board members communicating, directly or indirectly, outside a public meeting on a subject under their agency’s jurisdiction.

Santa Margarita, however, asserts that its board had no presentation or policy discussion on Cadiz inside or outside an open meeting before approving the negotiations.

Approving the negotiations and intended agreement terms “was a preliminary step and a means to get the public and public policy discussions started,” the district declared in a written statement. “Before Cadiz or SMWD used resources to further review the proposed project and any policy considerations, both parties needed to know preliminary price and terms.”

Miller, the spokeswoman, didn’t return phone messages this week. The district’s top manager, John Schatz, who is also the district's attorney, declined to comment.

Francke, however, doubts Santa Margarita’s claim.

“The idea that there was never any preliminary discussion of these policy issues — I guess people are entitled to believe whatever they want,” he said.

“Whether you’re talking about a car or a house or any other substantial and significant purchase or transaction, you don’t name the other party to negotiation, and then in closed session decide the policy issue of whether it’s a prudent thing to do and what are the advantages or disadvantages.”

Two members of Santa Margarita’s board, Roger Faubel and Saundra Jacobs, initially said they don’t remember whether the board held a policy discussion on Cadiz before approving negotiations.

Faubel and board members Charlie Wilson and Betty Olson later declined to elaborate on the thinking behind having the board approve negotiations before any presentation or policy discussion, as the district says it did.

“Why think about the policies until you know how much you’re going to pay,” Jacobs said before declining to comment further.

Board President Bill Lawson didn’t return a phone message.

Debbie Cook, an environmentalist and former mayor of Huntington Beach, believes Santa Margarita has been discussing policy in secret — another closed session on Cadiz was held this past December — and that it goes against the concept of open government.

“They’re a policy making body, and they have held their policy discussion in closed session,” said Cook. “So the public is completely eliminated from any discussion of this, and that is just counter to our democratic process.”

May 19, 2012

Ocotillo -- In a precedent that has horrified wildlife experts, the U.S. Fish & Wildlife Service has authorized the “take” (meaning harassment, displacement or even death) of 10 endangered Peninsular Bighorn Sheep – five ewes and five lambs.

The decision comes after federal wildlife officials were provided photographic evidence that the endangered animals were seen in recent weeks on the site of the just-approved Ocotillo Express wind energy facility—a presence federal officials and the project developer have long denied.

Mark Jorgensen is the retired Superintendent of Anza-Borrego Desert State Park, which shares a five mile border with the Ocotillo Express wind project now under construction on adjacent public property owned by the federal Bureau of Land Management (BLM). He is horrified at the decision to allow the killing of the sheep on land that until recently was designated as critical bighorn habitat.

Jorgensen calls the decision “astounding” in a comment submitted on the Biological Opinion, adding that the USF&W “is charged with protecting this endangered population—and it is not showing any leadership in safeguarding the [Endangered Species Act] ESA.”

According to the USF&WS website, “The mission of the U.S. Fish and Wildlife Service is working with others to conserve, protect, and enhance fish, wildlife, plants, and their habitats for the continuing benefit of the American people.”

There are only about 950 Peninsular Bighorn Sheep left in the U.S. as of 2010. Their numbers had steadily declined prior to being declared an endangered species in 1998, according to the Bighorn Institute.

The “take” authorization is found in a Biological Opinion issued by the Carlsbad, California office of the U.S. Fish & Wildlife Service (USF&WS) to the Bureau of Land Management (BLM) on April 25, 2012. U.S. Interior Secretary Ken Salazar signed a final Record of Decision last week authorizing the Ocotillo wind facility. His decision relied on the USF&WS document, among others.

Wind energy corporations in other parts of the country have been issued take permits for endangered eagles, our national symbol--all part of new policies implemented amid the rush to fast-track so-called "green" energy projects.

Until recently, over 800,000 acres in the area were designated as critical habit for the Peninsular Desert Bighorn Sheep. But that number was recently sliced to less than half—370,000 acres—by the USF&WS, a convenient decision for Pattern Energy, developer of the 12,500 acre Ocotillo Express wind project as well as other local developers whose proposed projects were similar removed from bighorn habitat designation.

Jorgensen accuses the USF&WS of bowing to political pressures and ignoring evidence. “They claim this was a result of `new science’ and a legal challenge, but they’ve never produced the science to substantiate their reduction,” he wrote in the the Biological Opinion submitted on May 2, 2012.

At times, the habitat removal borders on sheer incredulity. The only officially designated bighorn habitat on the 12,500 Ocotillo wind site is an “island”, or median area between the north and southbound lanes of the Interstate 8 freeway.

The Ocotillo wind project shares a five-mile boundary with Anza Borrego Desert State Park. Jorgensen and others have voiced concerns that the wind project cuts off a key corridor used by the sheep to migrate to and from the park seasonally.

Jorgensen has previously turned whistleblower, telilng ECM that the California Governor's office issued a gag order two days before the deadline for comments on the wind project's Environmental Impact Statement -- preventing state park employees from turrning in a comment that had been worked on for months. The muzzled comments included concerns over the project's impacts on endangered Bighorn sheep, according to Jorgensen.

Governor Jerry Brown's office has denied that a gag order was issued. But the Borrego Sun subsequently published a news article revealing that multiple individuals with close ties to Anza Borrego Desert State Park confirmed that state park employees were gagged. The nonprofit Anza Borrego Desert State Foundation, however, has issued scathing criticism of the project's potential impacts on wildlife including Bighorn sheep and denounced both state and federal officials for failing in their duties to protect endangered wildlife and habitat.

Above the project site to the west, construction of the high-voltage Sunrise Powerlink line in McCain Valley has disrupted additional bighorn habitat—and now a second wind facility, Tule Wind, has been approved by the BLM for construction in McCain Valley. With trucks and helicopters throughout the region, California Highway Patrol has recently had to use bullhorns to scare displaced bighorn off the freeway itself.

Pattern did remove some turbines slated to go into rocky areas, but has insisted that no bighorn sheep have been seen on the flat, sandy areas.

Two photographers sent ECM photographs of bighorn in the area as recently as April. Those photos showed a herd of the endangered animals on the project boundary—some with radio tracking collars and ear tags visible. One shot shows sheep standing in flat sand, not rocks.

ECM sent those photos to federal wildlife officials to document presence of the sheep on the project site. But instead of taking action to protect the endangered animals, the USF&WS authorized their destruction—and Secretary Salazar signed their death warrant.

Jorgensen had proposed that the entire project be rejected. Failing that, he sought removal of eight turbines within three-quarters of a mile of a documented lambing area. He also urged federal officials to consider the “overwhelming cumulative impacts being generated in the area” including two wind projects, two high-voltage powerlines, I-8, Border Patrol’s increased activity, off-road-vehicle activity and more.

Astoundingly, the USF&WS document claims that the project does not constitute a significant loss in habitat.

Pattern has agreed to a monitoring and mitigation plan, including restoration of historic bighorn habitat at Carrizo Creek. However that does not account for the disruption in habitat conductivity that the massive project will cause -- a concern raised by numerous wildlife experts in the area.

The project developer misleadingly has stated that only a small fraction of the 12,500 acres will be impacted—but fails to count the spaces between turbines as impacted areas even though they will be beneath blades each with a sweep area the size of a football field, each generating infrasound capable of causing health impacts, blade flicker, and noise described by some as similar to a helicopter hovering constantly. Wind facilities can also generate stray voltage capable of causing injury or even death; entire herds of cattle have been known to die from ground current.

Ominously, the Biological Opinion further makes reference to “incidental take”, leaving the door open to authorize even more bighorn deaths.

“This is not acceptable for USF&WS to permit,” Jorgensen says of the five ewes and five lambs authorized for potential destruction. His comment concludes emphatically that the USF&WS has “NO EXCUSE for this action!”

A massive excavation area at the site will be for a 785,000 "pond", a worker told an ECM photographer Jim Pelley. Pelley fears the pond may contain brackish water that could harm bighorn sheep or other wildlife.

Courtney Coyle, attorney for the Viejas tribe, told ECM she did not see a reference to where the pond would be locatedin the project EIS. "This is part of the changing project descriptions issue," she said.

Significantly, the final project approval document signed by Salazar state that the project will power a mere 25,000 homes--a four-fifths drop from the 130,000 homes claimed by Pattern in its testimony to Imperial Valley Supervisors, County Planners, and in the EIS. Where did the missing 105,000 homes go? Were approvals granted under false pretexts?

Moreover, the wind speeds Pattern know acknowledges at the project site are lower than the Department of Energy's recommended minimum standard for a viable wind energy project.

The site also poses risks to human health, from deadly Valley Fever spores being kicked up by construction dust to infrasound hazards to residents of Ocotillo, who will be surrounded on three sides by whirling turbines 450 tall or more.

If the project is going to generate only a fifth of the power promised by proponents, and the hidden costs are staggering and irreversible, why hasn't the federal government halted the project and weighed whether federal subsidies should be withdrawn?

Robert Scheid is spokesman for the Viejas Band of the Kumeyaay Nation, one of several Indian tribes fighting to halt the project due to threats to Native American remains, artifacts, ancient geoglyphs and sacred sites. Scheid has called the Ocotillo project a "land grab of public lands by private corporations."

The Quechan tribe on Friday asked a federal judge to issue a temporary restraining order to halt the devastation, after forensic dogs hired by tribes found six additional apparent cremation sites.

Meanwhile, bulldozers have begun the task of destroying the fragile desert terrain, wiping out habitat even as multiple lawsuits make their way into the courts seeking to protect Native American cultural sites as well as wildlife habitat.

Absent a restraining order soon, however, both the endangered Bighorn and countlesss Native American sacred sites may soon be gone with the wind.

May 16, 2012

The plan cooked up by politically connected investors to deliver water from a remote corner of the Mojave to thirsty Southern California cities refuses to die after more than two decades. In fact, Cadiz might be gaining impetus as cities down near the end of the California water straw get more desperate.

The latest incarnation is to extract groundwater and ship it toward the coast.

How the LA Times can do a new story on Cadiz without mentioning Mayor Antonio Villaraigosa or Arnold Schwarzenegger (and barely mentioning their pal who is at the center of things, Keith Brackpool) is a mystery. Especially after all the paper's previous reporting through the years on the Brackpool connection and Cadiz.

Cadiz Inc. could realize $1 billion to $2 billion in revenue over the plan's 50-year life. Opponents say public resources are being used for private profit

Scott Slater, president and general counsel of Cadiz Inc., watches as water pours into a spreading basin. The basin holds water from a pilot well used for testing. Cadiz Inc. hopes to build a pipeline to export groundwater from the Mojave Desert. (Al Seib / Los Angeles Times)

By Bettina Boxall
Los Angeles Times

CADIZ, Calif. – Three decades ago a group of businessmen pored over NASA satellite imagery as part of a worldwide hunt for large groundwater reserves they could tap to grow desert crops. They found the signs they were looking for here in the sun-blasted mountain ranges and creosote-freckled valleys of the Mojave Desert, 200 miles east of Los Angeles.

The group, which founded Cadiz Inc., bought old railroad land, drilled wells and planted neat grids of citrus trees and grapevines, irrigating them with water that bubbled out of the desert depths at the rate of 2,000 gallons a minute.

But by the mid-1990s, Cadiz had a new business plan: Sell water, not lemons.

The company is pushing ahead with a proposal to pump enough groundwater every year to supply 100,000 homes and sell it to urban Southern California at prices that could, over the project's 50-year life, reap $1 billion to $2 billion in revenue.

If the plan succeeds, it will turn ancient desert groundwater, a public resource, into a fountain of private profit, blazing a new — and some warn ominous — path in the state.

"I think we're setting a precedent here for the development of groundwater in the Mojave Desert," said hydrologist John Bredehoeft, a former regional manager for the U.S. Geological Survey who was hired by conservation groups to review the project.

Critics question whether the Southland, infamous for slaking its thirst with water from the Owens Valley and elsewhere, should now draw new supplies from pristine desert watersheds.

"It's taking a public resource that originates on public land, privatizing it and selling it back to the public," said Seth Shteir of the National Parks Conservation Assn., one of a dozen environmental groups challenging the project. "This water is going to Orange County lawns and swimming pools. The desert is being asked to shoulder the burden."

Keith Brackpool, the corporation's politically connected, British-born chief executive, has spent the last 15 years trying to get into the water business. He came close in 2002, nearly sealing a pact with the Metropolitan Water District of Southern California, the region's giant water wholesaler.

The company has made enough progress with its latest proposal to worry long-standing opponents, including Sen. Dianne Feinstein (D-Calif.), who on Friday called for a federal review of the project. Cadiz has lined up new customers, released a thick pile of environmental documents and hired one of the West's most powerful law firms.

At times sounding like they are describing a major oil discovery, Cadiz officials are pitching the project as a dependable alternative to water deliveries from Northern California and the Colorado River that have been squeezed by drought and environmental regulations.

"It is more reliable than anything out there," said Cadiz President and General Counsel Scott Slater, a partner in the Denver-based law firm of Brownstein Hyatt Farber Schreck, which runs one of the top-grossing lobbying operations in Washington. "The environmental effects are nominal."

A veteran water attorney, Slater is the project's chief spokesman. Brackpool, chairman of the California Horse Racing Board and a past contributor to high-profile Democrats, has stayed in the background. Thirty years ago he was fined by a British court for dealing in securities without a license.

Federal lands surround the 34,000 acres the company owns just south of Route 66 near the old railroad stop of Cadiz. A half-dozen congressionally designated wilderness areas are close by. About 15 miles to the north lies the 1.6-million-acre Mojave National Preserve, managed by the National Park Service.

Cadiz's proposed network of 30 wells, each about 1,000 feet deep, would pump groundwater that flows from beneath these public lands and is replenished by rain and snowmelt from their mountain ranges: the Providence and New York, the Marble and the Clipper.

The aquifer dates from wetter times long ago, when water seeped into subterranean layers of sand and gravel and deep, ancient formations of limestone and dolomite. Cadiz believes there is enough groundwater to fill California's largest reservoir roughly four to seven times over.

Despite Slater's assurances, the plan involves a calculated risk to the desert.

About 11 miles from the Cadiz lemon groves, on the south side of the Clipper Mountains, is Bonanza Spring. It is the closest to the proposed well field of more than two dozen springs in the area. Bighorn sheep, bobcats and other wildlife come here to lap from the shallow pools of water amid reeds and willow trees, a shock of green in the Mojave's brown palette.

Experts hired by Cadiz say they are confident the pumping would not hurt Bonanza and the other springs because they are at higher elevations and get their water before it drains into the valley aquifers. "There's no way we could affect springs up there," said Terry Foreman, senior hydrogeologist and vice president of CH2M HILL, nodding toward the mountains.

Federal scientists say Cadiz has yet to prove the springs have no connection to the aquifers. "It may be true and it might not be true," said Debra Hughson, science advisor for the Mojave preserve. Regardless, she called the project an "unsustainable groundwater mining proposal."

Cadiz intends to withdraw more water every year than nature puts back in the ground, lowering the groundwater table and depleting the aquifer. By how much, and whether that will harm the fragile desert environment of nearby public lands, remain important questions.

No one really knows the rate of natural groundwater replenishment in the 1,300-square-mile area that drains toward the Cadiz operation. Scientists can only estimate it based largely on conceptual modeling that has yielded a wide range of numbers over the years.

Federal hydrologists and scientists hired by environmental groups say the natural recharge rate is at most half — and could be less than a sixth — of what Cadiz's experts say it is.

Acknowledging the dispute, the project's draft environmental report, released in December, concludes that a half century of pumping would deplete native groundwater reserves by a minimum of 3% and possibly as much as 13%, depending on natural replenishment rates and the size of the aquifer.

Nearly four centuries would have to pass before aquifer storage fully recovered from the larger decline.

Financing is another looming question. The project has a preliminary price tag of $225 million to $275 million. According to the company's latest annual report, Cadiz, which is publicly traded, is losing money on its operations and has a debt of $56.6 million.

It has so far struck option agreements to sell up to 80% of the groundwater to three investor-owned utilities and three public water districts that serve portions of Southern California, including the second largest in Orange County, Santa Margarita.

To price the supplies competitively, Cadiz is hoping for public subsidies. Those include credits from the Metropolitan Water District, state and federal grants and public financing of some or all of the capital costs of the project's most expensive component, a 43-mile pipeline that would transport water from the well field to the Colorado River Aqueduct.

Without subsidies, the options show that Cadiz water would be among the most expensive in the Southland, nearly $1,100 an acre-foot for untreated supplies. Treatment would further jack up the price. Metropolitan plans to next year charge $847 an acre-foot for treated supplies.

John Schatz, general manager of the Santa Margarita district, which has signed up for the biggest share of Cadiz water and is leading the project's environmental review process, said the price is high but Metropolitan rates are rising and the groundwater's reliability adds to its value.

Under the proposal, Santa Margarita and other customers would form a private mutual water company that would buy supplies from Cadiz and manage the operation. Mutual water companies are not regulated by the California Public Utilities Commission and members would be free to sell their water. "We certainly contemplated that in the overall approach," Schatz said.

Nor is groundwater use regulated by the state. San Bernardino County supervisors — who have received $79,500 combined in campaign contributions from Cadiz since 2007 — recently voted to give Cadiz an exemption from the county's desert groundwater ordinance, instead approving an agreement that gives the county authority to enforce the project's monitoring and management plan.

Missing from the oversight lineup are the federal agencies that manage nearby land. Cadiz argues that it does not need federal approval because its pipeline route follows an existing railroad right-of-way.

But a recent Interior Department solicitor's opinion held that railroads cannot authorize activities in their federal right-of-ways "that bear no relationship to the construction or operation of a railroad."

In a Friday letter to Interior Secretary Ken Salazar, Feinstein dismissed Cadiz's arguments that the railroad could use the pipeline to put out trestle fires and wash rail cars.

"California's Mojave Desert is a unique and special place … that must be protected," wrote Feinstein, requesting a full review of the project under federal environmental law.

May 14, 2012

LOS ANGELES--(BUSINESS WIRE)-- Cadiz Inc. announced today that the Board of Directors of Santa Margarita Water District (“SMWD”), the Lead Agency for the proposed Cadiz Valley Water Conservation, Recovery and Storage Project (“Project”), voted on Friday, May 11, 2012 to approve an agreement with the County of San Bernardino and Cadiz regarding the County’s role in the Project’s groundwater management program. The Memorandum of Understanding (“MOU”) agreement, also approved by San Bernardino County’s Board of Supervisors on May 1, 2012, grants the County full enforcement authority over the Project’s proposed Groundwater Management, Monitoring, and Mitigation Plan (“GMMMP”).

The Company issued a press release on May 2, 2012 describing the MOU and the GMMMP in further detail.

"Cadiz is committed to providing a safe and reliable water supply solution for Southern California," said Scott Slater, Cadiz Inc. President and General Counsel. "We look forward to working with the County and SMWD to implement a sound management program that will conserve precious groundwater resources without harm to the environment."

May 12, 2012

Long-time desert citizens in the eastern half of San Bernardino County will recall the cheekily misnamed "Low Level Radioactive Waste Repository" in Ward Valley, which turned out to be a massive nuclear dump.

Currently, the misnamed Cadiz water "conservation" proposal is really a massive water privatization scheme - an Owen's Valley-like water grab.

A long struggle with strong public opposition throughout the 1990s brought an end to both an earlier version of the Cadiz water grab and the nuclear dump, a victory over the privatization of scarce public resources. Those projects required collaborators in positions of power - a British ex-patriot and political fundraiser, Keith Brackpool, currently the chairman of the California Horse Racing Board, originally conjured up the incarnated Cadiz proposal over a decade ago.

Now, 1st District Supervisor Brad Mitzelfelt is greasing the wheels for the new version of the Cadiz water grab, even though locally, the city of Needles refused support.

What entitles one hedge-fund-backed investment firm, currently using only 2,000 acre-feet of water per year, the right to sell 50,000 to 75,000 acre-feet yearly of precious, life-giving, desert water, right out from under desert residents, businesses and growing desert markets?

Water is a public resource owned by citizens of the county and the entire state, as guaranteed by the California Constitution. That is why the East Mojave Landowners Association isopposed to the project.

Proponents, imagining that water not shipped from the desert is somehow lost, tout exaggerated evaporation figures as a justification for taking the water. They calculate evaporation rates in Cadiz Valley to be greater than that of Death Valley - go figure. They propose pumping Fenner Valley water before it reaches Cadiz Valley, but then, nonsensically, would divert Colorado River water to the very place where they claim Fenner water is being "lost" to evaporation.

Sound like a shell game? This is no safe bet; instead it's a guaranteed loss of the high water table and evaporation that cools the desert environment, critical to the desert ecosystem.

Given the importance of our groundwater as a shared public resource, the Board of Supervisors could have considered this to be the county's own public works project, conserving and using this water to benefit our local government, roads, schools, libraries, etc. So why would they vote to privatize the water and its sale while the risks and potential liability will be the publics' should the company walk away?

Several weeks ago the supervisors approved another $350,000 in project legal costs. A skeptic would easily connect the fact that Cadiz has fed the bank account of Supervisor Mitzelfelt $48,000, ostensibly for campaigns.

On May 1, after a scant five-day notice, the supervisors approved an exemption that severely limits the county's ability to monitor and enforce rules against harmful impacts to the water table. The approved Memorandum of Understanding (MOU) forces the county to wait an entire decade for information about harm to the aquifer.

The county is supposed to act as lead agency for environmental review of the project, but the supervisors punted that responsibility to an Orange County water district nearly 200 miles away from the project and without accountability to us. The Supervisors' assertion that they can cede Santa Margarita Water District (SMWD) statutory authority through an MOU is convoluted, disingenuous and corrupt. It delivers a role to SMWD that it cannot perform without a fatal conflict of interest: SMWD will purchase and benefit from the privatizing of our water.

Both independent experts and the U.S. Geological Survey have repeatedly demonstrated that the Cadiz project is unsustainable. Lowering the water table will turn our spring-dependent desert into a sandy wasteland, endangering scenic resources, wildlife and plant species - and accompanying tourism.

At best, the Cadiz project will provide short-term construction jobs, while a few others will get incredibly rich. At worst, the Cadiz project sets a dangerous precedent for giving away one of our county's most precious resources: our water supply. The Cadiz project is not a long-term solution and will simply generate more problems including environmental and economic calamity.

We didn't fight the supervisors in the '90s to defend our East Mojave groundwater against nuclear contamination just to have it now pumped out from under us by Cadiz. The supervisors should abandon their current supportive course, reject any future enabling approvals, and stand up against such an ill-conceived and harmful project.

Ruth Musser-Lopez is principal of the Archaeological Heritage Association of the Lower Colorado River;

May 7, 2012

Jackrabbit homesteads are only for folks who have a bit of pioneering blood in their veins. The land generally is rough, no water is immediately available, more or less road building has to be done. But fortunately there are many Americans who find infinite pleasure in doing the hard work necessary to provide living accommodations on one of these sites--and cabins are springing up all over the desert country.

--Desert Magazine, 1950

Beyond the proliferation of big box chains, car dealerships, fast food joints, and the nameless sprawl located along California State Highway 62 the desert opens up. Out there, where signs of familiar habitation seem to fade from view, a variance appears in the landscape in the form of small, dusty cabins --mostly abandoned--scattered across the landscape. The majority of the existing shacks, historically found throughout the larger region known as the Morongo Basin, lie east of Twentynine Palms in outlying Wonder Valley. The curious presence of these structures indicated that you are entering one of the remaining communities of "jackrabbit" homesteads left in the American West. The mostly derelict structures located among the occasional inhabited ones are the remaining physical evidence of former occupants who were some of the last to receive land from Uncle Sam for a nominal fee through the Small Tract Act of 1938.

One of the many land acts designed to dispose of "useless" federal lands from the public domain, the Small Tract Act authorized the lease of up to five acres of public land for recreational purpose or use as a home, cabin, camp, health convalescent, or business site to able-bodied U.S. citizens. If the applicant made the necessary improvements to his or her claim by constructing a small dwelling within three years of the lease, the applicant could file for a patent--the federal government's form of a deed--after purchasing the parcel for the appraised price (on average $10 to $20 an acre) at the regional land office. This highly popular mid-century homestead movement reflects the quintessential American desire to claim territory and own a piece of the land even if the property in question is virtually "worthless" from an economic perspective.

Although some cabins have been passed down from the original jackrabbit homesteaders to family members for recreation and other purposes, today the majority of the area's jackrabbit homesteads have fallen beyond repair, lending a ghostly and feral presence to the landscape. Others have found new function as primary, full-time residences with modifications, often referred to as "biltmores" by area residents. A small, but growing community of artists and musicians fleeing rising housing prices and general urban ills of the Los Angeles metropolitan area are reclaiming and re-envisioning the structures as artist studios or as creative retreats. Inventive enclaves forming within this geographically defined area are inspired by the Morongo Basin's spacious desert backdrop, its perceived tranquility, and a desire to form a sense of community within a rural environment. Many have migrated to the region with aspirations uncannily akin to the original homesteaders and share similar outlooks or values with them.

In their quest for renewal and reinvention, musicians and other artists have converged on this part of the desert during the past half-century for the creative stimulation that the openness of the place provides. Cosmic, country-rock music icon Gram Parsons, who frequented Joshua Tree often, died there; and other musicians, such as Tim Easton, Gram Rabbit, Ann Magnuson, and Victoria Williams have homes there.

Artists see the desert as a place of refuge and as a source of inspiration. Joshua Tree and its vicinity are home to a well-documented community of creative types. Bob Arnett, Diane Best, Helena Bongartz, Chris Carraher, Shari Elf, Perry Hoffmanm, Mary-Austin Klein, Jack Pierson, Randy Polumbo, and Andrea Zittel are some of the diverse group of artists living throughout the Morongo Basin and who also own cabins originally built by jackrabbit homesteaders. There have been numerous in-depth articles in both the New York Times and Los Angeles Times concerning the artists' presence in the area. Zittel, an internationally-known artist living in Joshua Tree, co-hosts the High Desert Sites, a biannual series of experimental, site-specific art projects, providing an alternative space for both local and out-of-town artists. Helena Bongartz employs the architectural structure of the cabins directly in her art, using the fascade of an abandoned shack near Amboy to project her video work at night.

Historically, the region has also served as a place to build alternative communities, including those of gays and lesbians. It is not known how many gays and lesbians settled in jackrabbit homesteaders, but there is speculation that some are believed to have done so. A long-time lesbian resident refers affectionately to her neighborhood as the "gay ghetto," a tightly knit community home to many practicing artists who have restored cabins into artist studios and very distinctive creative retreats.

As structures for the imagination, the abandoned cabins have become a catalyst for various human projections, where physical and symbolic constructions of space play out over time. If you look closely, you may also find that the cabins reveal a personal text that describes their former occupants in a much more intimate way. Chris Carraher, an artist and cabin dweller in Wonder Valley, asserts: "The homestead cabin is the other icon that figures this place for me. A pervasive relic of a small-time working-class fantasy land-rush, it is the American Dream writ miniature. Abandoned, ghostly, habited, or reclaimed, the cabin is a lone prop that sets the stage of this tremendous theater at the edge of civilization and wildness, a porous vessel through which the desert and human pass, and pass again."

About the Jackrabbit Homestead Project:

Jackrabbit Homestead is a project produced by Kim Stringfellow exploring the cultural legacy of the Small Tract Act in Southern California's Morongo Basin region near Joshua Tree National Park through a physical installation of photographs, maps, documents, and other related materials. Another component of this project is the Web-based multimedia presentation featuring a free, downloadable car audio tour component available at www.jackrabbithomestead.com. The accompanying book, Jackrabbit Homestead: Tracing the Small Tract Act in the Southern California Landscape, 1938-2008 was published in 2009 by the Center for American Places. The Web site and audio tour were funded by the California Council for the Humanites California Story Fund initiative and were released in March 2009.

May 4, 2012

A sign marks the property in the Mojave Desert where Cadiz Inc. farms grapes and citrus, and hopes to sell water from a giant aquifer under its land.

BY CASSIE MACDUFF
Press-Enterprise

Food is generally not allowed in the San Bernardino County Board of Supervisors chambers.

But one morning a decade and a half ago, crates of picture-perfect green grapes were carried ceremoniously down the steps and presented to the board.

The point being made by officials of Cadiz Inc. was that their farm — in the remote Mojave Desert — was growing over a pristine pool of underground water that could produce such bounty.

At the time, Cadiz Inc. was fighting a proposed landfill it feared would contaminate the untouched aquifer.

The dump plan ultimately fell apart. But what Cadiz Inc. was really protecting that day wasn’t its farm. It was a multimillion-dollar plan to sell the water to the giant Metropolitan Water District.

The water-sale plan, too, fell apart a few years later.

Desert residents and environmentalists had raised alarms that extracting 150,000 acre-feet of water annually would turn Cadiz Valley into another Owens Valley, the dust bowl east of the Sierra created by Los Angeles slaking its metropolitan thirst.

By 2001, MWD backed away from the Cadiz plan.

End of story? Nope.

Cadiz Inc. is back, but with a different partner: the Santa Margarita Water District, of south Orange County.
Cadiz scaled back the amount of water it will draw to 50,000 acre-feet per year. It won’t replenish the aquifer with Colorado River water.

And instead of running a pipeline across pristine desert, it secured 43 miles of railroad right-of-way to carry it, said Cadiz spokeswoman Courtney Degener.

But the environmental concerns remain.

Desert residents and advocates still worry that pumping out water will dry up existing wells and springs, parch plants, deprive wildlife of watering holes and create a dust bowl.

The National Parks Conservation Association hired a consultant to examine the draft environmental report and found flaws, said the association’s California desert representative Seth Shteir.

“We believe the recharge (from natural rainfall) is lower than the EIR says: about half of 32,500 acre-feet per year,” Shteir said.

Of equal concern is that the Orange County water district is conducting the environmental review of the project. Critics believe San Bernardino County, where the aquifer is located, should have done the review.
Santa Margarita Water District has a vested interest in approving the project, since it will benefit from buying the water, Shteir said.

It meets mostly in Orange County, which makes it difficult for desert residents to attend, said Victoria Fuller, of the Joshua Tree Community Association. “It’s $50 to $75 in gas money just to get there.”

San Bernardino County could have fought to be lead agency, said CEO Greg Devereaux. But rather than risk losing and being cut out entirely, the county last week agreed with Cadiz and the water district that the county will oversee and enforce environmental rules.

The county will set conditions for the project, and be empowered to halt it if harm to the environment is done, said Dan Ferons, chief engineer for Santa Margarita.

May 1, 2012

San Bernardino County supervisors approved an agreement Tuesday spelling out the review process for a controversial proposal to draw water from ancient aquifers in the Mojave Desert.

The agreement provides for county oversight of the $225 million project in the Cadiz Valley, about 40 miles east of Twentynine Palms, that would involve building 44 miles of pipeline to move surplus water from the Colorado Aqueduct to an underground basin the size of Rhode Island.

The water rights under 34,000 acres belong to Cadiz Inc., which also wants to tap water from beneath nearby dry lake beds that it says would otherwise be lost to evaporation.

The Cadiz project has been rejected and reworked since it was first proposed in 1997.

Environmentalists say it would deplete ancient groundwater that feeds area springs and sustains local wildlife. One-third of the aquifer sits below the Mojave National Preserve.

Cadiz estimates that about 2 million acre feet of water that flows downhill to dry lakes in the watershed is lost to evaporation. The project would collect 50,000 acre feet a year to local water agencies, including possibly some in Riverside and San Bernardino counties.

“It is in essence by definition a conservation project,” said Scott Slater, president and general counsel for Cadiz.

During the 31/2-hour hearing, environmentalists and residents in the Mojave Valley urged the county not to allow the project to go forward. They questioned Cadiz’s studies that natural recharge of the aquifers will make up for water that is pumped out.

“The Cadiz project sets a terrible precedent as water, a public resource, is privatized and then sold back to the public,” said Victoria Fuller, a member of the National Parks Conservation Association.

Supervisors also heard from local vendors and contractors who are among those who would benefit from the $874 million that Cadiz projects would pump into the economy over four years. Slater said the company plans to rely on vendors in the county for 80 percent of its materials, such as steel, pipe and drilling equipment, and have county residents make up 50 percent of its employees.

But opponents of the project noted that an Orange County water district, the Santa Margarita Water District, will get the largest share of the water collected from the aquifers. The district is also the lead agency responsible for reviewing and approving the environmental impact report for the project.

Christian Marsh, an attorney hired by the county to advise on the Cadiz project, said the agreement approved by the board sets up a framework for a review process that gives the county authority to approve or deny Cadiz a permit for the project.

Slater said he expected Cadiz would be back before the board for a vote on the project permit by late summer.

Supervisors approved the agreement on a 4-1 vote, with Supervisor Neil Derry in opposition. He said he was concerned about whether county residents would have enough of a voice in the approval process before the Santa Margarita Water District.